Montoya v. Sasso (In re Sasso), Case No. 7-12-14564 JA

CourtUnited States Bankruptcy Courts. Tenth Circuit. U.S. Bankruptcy Court — District of New Mexico
Writing for the CourtROBERT H. JACOBVITZ United States Bankruptcy Judge
PartiesIn re: GARY EDWARD SASSO, Debtor. PHILIP J. MONTOYA, Chapter 7 Trustee of the bankruptcy estate of Gary Edward Sasso, Plaintiff, v. GARY EDWARD SASSO, DEBRA SASSO, ARON FINCH, and ACE ENTERPRISES, LLC, Defendants.
Docket NumberCase No. 7-12-14564 JA,Adv. Proc. No. 15-1043 J
Decision Date14 April 2016

In re: GARY EDWARD SASSO, Debtor.

PHILIP J. MONTOYA, Chapter 7 Trustee
of the bankruptcy estate of Gary Edward Sasso, Plaintiff,
v.
GARY EDWARD SASSO, DEBRA SASSO, ARON FINCH,
and ACE ENTERPRISES, LLC, Defendants.

Case No. 7-12-14564 JA
Adv. Proc.
No. 15-1043 J

UNITED STATES BANKRUPTCY COURT DISTRICT OF NEW MEXICO

April 14, 2016


MEMORANDUM OPINION

THIS MATTER is before the Court on the Plaintiff's Motion for Partial Summary Judgment on Counts 17 and 18 of the Amended Complaint ("Motion"). See Docket No. 46. Counts 17 and 18 of the Amended Complaint seek a declaratory judgment determining, among other things, that the bankruptcy estate has an interest in the following assets: 1) a 2002 Harley Davidson XL8 Motorcycle, VIN # 1HD4GJM182K115436 (the "2002 Harley"); 2) a 2008 Honda VTX180 Motorcycle, VIN # 1HFSC49T18A600008 (the "2008 Honda"); and 3) a 2013 Monte Carlo 40SC Trailer, VIN # 5CZ200R36D1123116 (the "Monte Carlo"). Defendants Gary Edward Sasso and Debra Sasso concede that the 2002 Harley and the 2008 Honda are assets of the bankruptcy estate and entered into a stipulated order to that effect. See Stipulated Order Determining Honda and Harley Motorcycles are Property of the Bankruptcy Estate - Docket No. 53. What remains at issue is the ownership of the Monte Carlo.

Plaintiff Philip J. Montoya, Chapter 7 Trustee of the bankruptcy estate of Gary Edward Sasso ("Trustee" or "Plaintiff") contends that the Monte Carlo is community property such that

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the bankruptcy estate has a ½ interest in the Monte Carlo. He asserts that the facts not subject to genuine dispute entitle the Trustee to a declaratory judgment determining that Defendant Gary Sasso (the "Debtor") held a community property interest in the Monte Carlo as of the date he filed his voluntary petition under Chapter 7 of the Bankruptcy Code; that the Debtor failed to list his interest in the Monte Carlo on his bankruptcy schedules; and that the bankruptcy estate has a ½ interest in the Monte Carlo. Defendants Gary Sasso and Debra Sasso oppose the Motion, asserting that Debra Sasso purchased the Monte Carlo from separate funds she segregated from her social security income. See Sasso's Response to Plaintiff's Motion for Summary Judgment ("Response") - Docket No. 47. After considering the Motion and the Response, and being otherwise sufficiently informed, the Court finds that genuine issues of material fact concerning whether the Monte Carlo is separate or community property preclude the entry of summary judgment. The Court will, therefore, deny the Motion.

SUMMARY JUDGMENT STANDARDS

The Court will grant summary judgment when the requesting party demonstrates that there is no genuine dispute as to a material fact and that the movant is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(a), made applicable to adversary proceedings by Fed.R.Bankr.P. 7056. "[A] party seeking summary judgment always bears the initial responsibility of informing the ... court of the basis for its motion, and ... [must] demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

In considering a motion for summary judgment, the Court must "examine the factual record and reasonable inferences therefrom in the light most favorable to the party opposing summary judgment." Wolf v. Prudential Ins. Co. of America, 50 F.3d 793, 796 (10th Cir. 1995)

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(quoting Applied Genetics Int'l, Inc. v. First Affiliated Sec., Inc., 912 F.2d 1238, 1241 (10th Cir. 1990)). The party opposing summary judgment "may not rest on its pleadings, but must bring forward specific facts showing a genuine issue for trial as to those dispositive matters for which it carries the burden of proof." Kannady v. City of Kiowa, 590 F.3d 1161, 1169 (10th Cir. 2010) (quoting Jenkins v. Wood, 81 F.3d 988, 990 (10th Cir. 1996)). To resist a properly supported motion for summary judgment, the opposing party may not rely on the allegations in the complaint or the denials contained in the answer, "but must set forth specific facts showing that there is a genuine issue for trial" through affidavits or other supporting evidence. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (internal quotation marks omitted).

FACTS NOT SUBJECT TO GENUINE DISPUTE

Defendants do not contest any of the facts the Trustee identified in the Motion as not being subject to genuine dispute. The following facts relate to the issues surrounding the nature of the ownership of the Monte Carlo:

1. Defendants have been married since May 23, 2001.

2. On July 13, 2013, Debra Sasso purchased the Monte Carlo.

3. Defendants attempted to sell real property located at 69B Range Rd, Edgewood, New Mexico (the "Range Road Property") to LeighAnn and Samuel Harrison.

4. The Harrisons delivered monthly payments to the Debtor for the purchase of the Range Road Property.

5. Debtor gave all of the payments from the Harrisons for the purchase of the Range Road Property to Debra Sasso to repay her for her purchase of the Monte Carlo.

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DISCUSSION

New Mexico is a community property state. See Strong v. Eakin, 11 N.M. 107, 108, 66 P. 539, 540 (1901) ("[T]he Spanish-Mexican law as to community or acquest property became the law of this territory from the time of the cession, and is still in force in so far as the same has not been modified by statute.") (citations omitted).1 "Community property" is statutorily defined as "property acquired by either or both spouses during marriage which is not separate property." N.M.S.A. 1978 § 40-3-8(B). Under New Mexico law there is a presumption that all property acquired by either spouse during the marriage is community property. See N.M.S.A. 1978 § 40-3-12(A) ("Property acquired during marriage by either husband or wife, or both, is presumed to be community property."); Campbell v. Campbell, 62 N.M. 330, 340, 310 P.2d 266, 272 (1957) ("The presumption that all property acquired after marriage is community property was part of Spanish community property law and was recognized as an element of the community property system in this state prior to the time of its statutory pronouncement . . .") (citations omitted); Stroshine v. Stroshine, 98 N.M. 742, 743, 652 P.2d 1193, 1194 (1982) ("[P]roperty acquired by either or both spouses during their marriage is presumptively community property.") (citations omitted). A party asserting that property acquired during the marriage is, in fact, separate property, can overcome the presumption of community property by producing evidence of the separate character of the property by a preponderance of the evidence. See Nichols v. Nichols, 98 N.M. 322, 327, 648 P.2d 780, 785 (1982) ("A party asserting that such property is separate has the burden of presenting evidence that would rebut the presumption by a preponderance of the evidence.") (citations omitted); Campbell, 62 N.M. at 341, 310 P.2d at 273 ("[T]he

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contestant asserting the separate character of the property has not only the burden of going forward with his evidence, but of establishing separate ownership by a preponderance of evidence.") (citation omitted).

The facts not subject to genuine dispute establish that Debra Sasso purchased the Monte Carlo during her marriage to the Debtor. Under these facts, the Monte Carlo is presumed to be community property. To rebut the presumption, Defendants rely on excerpts from the deposition of Debra Sasso and the deposition of Gary Sasso concerning the acquisition of the Monte Carlo as evidence that the Monte Carlo is Debra Sasso's separate property. Defendants direct the Court to the following deposition testimony of Debra Sasso:

Q: Does that sound about right that you purchased this [the Monte Carlo] in July 2013?

A: It was that exact date because I broke three CDs and put into that from my savings.

Q: Where did you get the money for the CDs?

A: I saved it since '07. I had three back pays, monies that came in over a four-year period. I can prove that from the Social Security's office. The woman and man that was my advocate. When Gary's mom was dying, it was...

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